Prepare a statement of partnership liquidation and the entries to record the following: 1. Sale of all non-cash assets. 2. Distribution of gain on realization to the partners. 3. Payment of the liabilities. 4. Distribution of cash to the partners.
Prepare a statement of partnership liquidation and the entries to record the following: 1. Sale of all non-cash assets. 2. Distribution of gain on realization to the partners. 3. Payment of the liabilities. 4. Distribution of cash to the partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:liquidated. After making the closing entries on June 30, 2019, the following accounts
After several years of operations, the partnership of Arenas, Dulay and Laurente is to be
Lump-Sum Liquidation with Gain on Realization
Problem #1
remained open:
Account Balance
Account Title
Debit
Credit
Cash
Non-cash Assets
P 50,000
2,350,000
Liabilities
Arenas, Capital
Dulay, Capital
Laurente, Capital
P400,000
900,000
500,000
600,000
The non-cash assets are sold for P2,650,000. Profits and losses are shared equally.
Required:
Prepare a statement of partnership liquidation and the entries to record the following:
1. Sale of all non-cash assets.
2. Distribution of gain on realization to the partners.
3. Payment of the liabilities.
4. Distribution of cash to the partners.
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